Carbon Emission Reduction Decisions Research Articles

Carbon emission reduction decisions of supply chain differential game under different government intervention models

Carbon emission reduction decisions of supply chain differential game under different government intervention models

Carbon footprint accounting of prefabricated buildings: A circular economy perspective

Prefabricated buildings have gained significant attention as a solution for reducing carbon footprint in the construction industry. However, there is a lack of a comprehensive accounting approach tailored to the construction features of prefabricated buildings. To address this issue, this study develops a framework to account the life-cycle carbon footprint of prefabricated buildings within the circular economy principles. The developed framework is applied to a prefabricated building in Chengdu, China, revealing that a significant carbon footprint is attributed to the material production and transportation stages. Moreover, an uncertainty analysis is conducted based on Data Quality Indicator evaluation method and Monte Carlo Simulation to validate the accounting framework, and a minor deviation of 0.085 % between the uncertain and calculated values validates the proposed accounting framework. Furthermore, key processes to mitigate the carbon footprint are identified. The results show that cast-in-place concrete is a key process at the construction materials level. Building upon these findings, this study offers recommendations on accurately and efficiently accounting the carbon footprint of prefabricated buildings. The research findings contribute to fostering the accounting of the life-cycle carbon footprint for prefabricated buildings, establishing a theoretical and empirical basis for circular economy implementation in prefabricated buildings, and offering insights for making informed carbon emission reduction decisions in prefabricated buildings.

Production and carbon emission reduction decisions of remanufacturing firms with low‐carbon credit financing under uncertain demand

AbstractThis paper investigates the optimal production and carbon reduction strategy for a capital‐constrained remanufacturing firm considering demand uncertainty. The remanufacturing firm can accept low‐carbon credit financing. We construct optimization models with no financing and low‐carbon credit financing and analyze the impacts of capital, carbon emission caps, and other factors on the remanufacturer's decision and profit. The results show that (i) the output of remanufactured products and overall profit are higher when using low‐carbon credit financing, regardless of strict carbon emission conditions; (ii) low‐carbon credit can help remanufacturers withstand the impact of carbon price fluctuations; (iii) the demand uncertainty of new and remanufactured products has opposite effects on carbon emission reduction investment; (iv) increasing the carbon cap can enhance the remanufacturing level while a high carbon cap reduce incentives to remanufacture.

Digitalization and carbon emission reduction technology R&D in a Stackelberg model

ABSTRACT This paper constructs a four-stage sequential game model considering digitalization and carbon emission reduction decisions, examines the effects of digitalization on firms’ emission reduction and carbon emission reduction technology R&D, and analyzes the optimal digitalization level. The results show that emissions reduction is correlated with the digitalization level, the cost-reduction effects, and the carbon tax rate; technology R&D benefits from digitalization support; there exists an optimal digitalization level that is nonlinearly affected by the carbon tax rate, and the digitalization level that satisfies the maximization of social welfare is higher, so the government should provide digitalization incentives.

Effects of interactions between technology spillovers and carbon transfers on carbon emission reduction decisions and coordination within supply chains

PurposeThis paper aims to refine the mechanisms affecting the two-way technology spillover and carbon transfer interactions between supply chain enterprises, and to guide their reduction of carbon emissions.Design/methodology/approachThis study formulates a supplier-led Stackelberg game model to explore the effects of the interactions between two-way technology spillover effects and carbon transfers in decentralized and centralized decision-making scenarios. The optimized Shapley value is introduced to coordinate across the supply chain and determine the overall profits lost in the decentralized scenario.FindingsEmission reductions by the low-carbon manufacturer are negatively correlated with the carbon transfers. Vertical technology spillovers promote carbon reduction, whereas horizontal technology spillovers inhibit it. The vertical technology spillovers amplify the negative effects of the carbon transfers, whereas the horizontal technology spillovers alleviate these negative effects. When the vertical technology spillover effect is strong or the horizontal technology spillover effect is weak in the centralized scenario, the carbon reduction is negatively correlated with the carbon transfers. Conversely, when the vertical technology spillover effect is weak or the horizontal technology spillover effect is strong, the enterprise’s carbon reduction is positively correlated with the carbon transfers. An optimized Shapley value can coordinate the supply chain.Originality/valueThis study examines the effects of carbon transfers on enterprises from a micro-perspective and distinguishes between vertical and horizontal technology spillovers to explore how carbon transfers and different types of technology spillovers affect enterprises’ decisions to reduce carbon emissions.

Manufacturer’s Green Financing and CER Decisions under the Carbon Tax Policy and Capital Constraints

This study constructs a two-echelon low-carbon supply chain consisting of a single manufacturer and a retailer. The manufacturer’s initial capital is zero. The study analyzes three financing modes of the manufacturer by using the Stackelberg game model: external financing (the EF mode), internal financing (the IF mode), and trade credit financing (the TC mode). We found that the IF mode is superior to the EF mode while inferior to the TC mode regarding carbon emission reduction (CER), market demand, and the manufacturer’s profit. Additionally, the IF mode is superior to the EF mode regarding the retailer and supply chain’s profits and special to the TC mode only when the loan and deposit interest rate meet the specific conditions. The best financing mode for the manufacturer is the TC mode, but he needs to give some compensation to the retailer in order to make the retailer cooperate with him. The impact of carbon tax rate changes on the equilibrium solutions in the three financing modes is not only related to the change range of the carbon tax rate itself but also closely related to the initial carbon emissions. A high carbon tax rate can help stimulate the cleaner manufacturer to reduce carbon emissions, but a moderate carbon tax rate is more applicable to the polluting manufacturer. A numerical example is given to demonstrate some of the conclusions. Finally, the study provides managerial insights based on the analytical results.

Is carbon asset pledge financing contributing to the operation of emission-dependent engineering machinery remanufacturing with emission abatement?

As a new financing strategy in the carbon trade market, carbon asset pledge financing (CAPF) provides a new financing channel for capital-constraint firms. For the carbon emission-dependent engineering machinery remanufacturer, how to formulate an optimal production plan under CAPF is still an unsolved problem. In this study, we suppose the emission-dependent remanufacturer adopts the pure carbon asset pledge financing (PCAPF) to solve capital shortage problem, and then study the optimal production and carbon emission reduction (CER) decisions of remanufacturers under PCAPF. The results show that: i) Only when the remanufacturer's initial capital is below a certain threshold can it benefit from PCAPF, and the threshold is different under all remanufacturing strategies. ii) Compared with no CER, the yield of new products increases when CER is implemented. However, whether remanufactured products increase depends on different remanufacturing strategies. iii) Under PCAPF, a high carbon asset pledge rate is not conducive to the production and profit of remanufacturers regardless of CER, and the increase of carbon price fluctuation coefficient negatively affects the production and environment without CER. However, the correlation among them is related to the threshold of the CER rate. iv) With/without CER, the yield of new/remanufactured products, environmental impact, and profit decrease sequentially with the choice of complete remanufacturing, partial remanufacturing, and non-remanufacturing under PCAPF. Meanwhile, although the increase of the CER rate increases environmental impact, whether it can improve the profit of remanufacturers is related to the threshold of unit emission of remanufactured products. Thus, the remanufacturer should balance the trade-off when implementing CER.

Decision models of pricing and carbon emission reduction for low-carbon supply chain under cap-and-trade regulation

All carbon emissions generated by supply chain (SC) members should be taken seriously. This paper constructs low-carbon SC models consisting of one supplier and one manufacturer under three power structures: supplier-led power structure, manufacturer-led power structure, and Nash competition power structure. Based on differential game theory, we explore SC members' optimal pricing and carbon emission reduction decisions by considering the impacts of consumers' low-carbon preference, cap-and-trade regulation, and power structure from a long-term perspective. The results indicate that consumers' low-carbon preference always benefits the environment and low-carbon SC performance. However, whether cap-and-trade regulation can improve the environment and low-carbon SC performance depends on the cap and the carbon trading price. Under three power structures, we provide the government with two important threshold caps: one threshold cap ensures that SC members can benefit from cap-and-trade regulation; another threshold cap ensures that SC members can obtain positive profits under cap-and-trade regulation. This paper also reveals that the decision-making priority is not a necessary condition for SC members to maximize profits.

Optimal pricing and carbon emission reduction decisions for a prefabricated building closed-loop supply chain under a carbon cap-and-trade regulation and government subsidies.

This paper explores a two-level prefabricated building closed-loop supply chain (CLSC) comprising a retailer and a prefabricated building manufacturer (PBM) under carbon cap-and-trade legislation and the government subsidies of carbon emission reduction (CER). In this CLSC, the PBM and the retailer recycle used products through their independent recycling channels. The optimum pricing and CER strategies within both decentralized and centralized systems, respectively, are analyzed. The Stackelberg game is used in the decentralized system to determine the optimum PBM's CER level and the retailer's pricing. By analysis, it concludes that increasing the carbon trading price can stimulate prefabricated construction corporations to improve their CER level, and that the government subsidy rate has a great effect on the profits of the PBM. Numerical examples with sensitivity analysis are used to further evaluate the roles of important factors in the optimum CER and pricing solutions of the prefabricated building CLSC in two dissimilar systems.

Research on Supply Chain Decision Making of Cold Chain Logistics Service Under Different Government Subsidy Policies

In the context of prioritizing environmental protection gradually becoming a general trend, how to achieve a balance between paying carbon tax and seeking government subsidies for cold chain logistics service supply chain members to further reduce carbon dioxide emissions of products will be an important decision faced by CCLSP. Based on the influence of the government's carbon tax on the cold chain logistics service supply chain, this paper analyzes the influence of different government subsidy policies on the carbon emission reduction decisions of cold chain logistics service providers (CCLSP), logistics information integrators (LSI) and the supply chain as a whole under the two scenarios of joint emission reduction and independent emission reduction. The effects of different subsidy methods and subsidy rates on carbon emission reduction, wholesale price, retail price and profit of CCLSP and LSI were explored, and the results were analyzed by numerical simulation. The results show that: in the case of joint emission reduction, emission reduction subsidy has a more positive impact on supply chain emission reduction and profit. In the case of independent emission reduction, both subsidy methods have a positive impact on the wholesale price, retail price and the profit of CCLSP and LSI. Which method is more effective needs to be selected according to the size of subsidy rate. To a certain extent, this paper provides opinions for the government to formulate a scientific and reasonable subsidy policy, which can provide a basis for CCLSP to reduce carbon emissions for inquiries.

Pricing and Carbon Mitigation in a Dual-Channel Supply Chain: A Dynamic Game Approach

ABSTRACT Considering the low-carbon preference of consumers, this paper establishes a dynamic decision-making model to study the dynamic pricing decisions and carbon emission reduction decisions of dual channel supply chain members, and discusses the impact of carbon emission reduction on prices and profits. It is found that the distributor’s and the producer’s carbon mitigation can have a positive or negative impact on the distribution price, the direct sales price and the wholesale price. When the competition between the distributor and the producer is not fierce, these three prices will increase with the increase of their carbon mitigation. When the producer’s carbon mitigation effort has a positive impact on the distribution channel demand, the distributor’s profit will increase with the increase of the producer’s carbon mitigation effort. On the other hand, when the producer’s carbon mitigation effort has a negative effect on the distribution channel demand, the distributor’s profit will decrease with the increase of the producer’s carbon mitigation effort. In addition, the distributor’s profit is more sensitive to the producer’s carbon emissions. When the producer and the distributor jointly reduce emissions, appropriate coordination strategies are needed to coordinate the supply chain.

Optimal Preservation Effort and Carbon Emission Reduction Decision of Three-Level Cold Chain System with Low-Carbon Advertising Effect

To solve the problems of the impact of carbon emission reduction and low-carbon advertising on the supply chain of fresh agricultural products, a three-level low-carbon supply chain system composed of a manufacturer, a retailer and a third-party logistics service provider is taken as the research object. The profit functions of each party under the three contracts of the manufacturer bearing, the retailer bearing and the two parties jointly bearing the advertising cost are, respectively, established to solve the optimal pricing, advertising level preservation efforts, service levels and carbon emission reduction decisions. The numerical analysis shows that, with the increase in wholesale price and the decrease in fresh-keeping price coefficient and low-carbon cost coefficient, manufacturers will choose better fresh-keeping effort level and low-carbon service level. When the proportion of advertising cost borne by the supplier increases, the benefits of all parties in the supply chain will decrease; however, when the retailer bears the advertising cost alone, the profit of the supply chain system is the largest.

Differential game model of carbon emission reduction decisions with two types of government contracts: Green funding and green technology

In this study, two differential pollution games are constructed according to the impacts of green technology and green funding on promoting carbon emission reduction. In the game, the government provides reasonable green funds or green technologies to encourage enterprises to reduce emissions. Enterprises choose the optimal production plan that maximizes their own interests according to the incentive mechanism of the government. We compare green funding and green technology in terms of total emissions, reduction efficiency and corporate profits. The results demonstrate that: (1) government contracts are not always beneficial for enterprises reducing emissions; (2) when the coverage of green funding is greater than a certain threshold, the emission reduction efficiency brought by green funds is better than that of green technologies; (3) when the funding intensity exceeds a certain value, there exists a optimal coverage of green funding to ensure that corporate profit targets and emission reduction targets are met simultaneously. The results provide a theoretical basis for the government to formulate an emission reduction incentive mechanism.

Allocation and optimization of carbon emission permits considering fairness and efficiency under the dual-carbon background

Reasonable and effective allocation of carbon emission permits is one of the important tasks to achieve the goal of carbon neutrality. Based on the difference in carbon emission reduction contribution and capability of the industries, this paper proposes a carbon emission permits allocation and optimization scheme that take into account fairness and efficiency. First, based on fairness principle, establish a carbon emission quota system of the six industries and determine the index weights, and use the comprehensive index method to realize the initial allocation of carbon emission permits. Then, on the basis of evaluating the initial carbon emission permits allocation efficiency, based on efficiency principle, the zero sum gains data envelopment analysis (ZSG-DEA) model is used to iteratively obtain the optimal allocation scheme of carbon emission permits. Example analysis shows that the carbon permit allocation and optimization model based on fairness and efficiency principles proposed can realize the optimal allocation of industrial carbon emission permits, ensure the optimal efficiency of industrial carbon permit allocation, and provide adequate support for the carbon emission reduction decisions of the six industries.

Optimal decisions in two-echelon supply chain under hybrid carbon regulations: The perspective of inner carbon trading

With the widespread use of carbon tax and cap-and-trade regulation, the coexistence of hybrid carbon regulations is becoming the trend. Under hybrid carbon regulations, considering consumers’ low-carbon preferences and carbon trading within the supply chain, a two-echelon supply chain consisting of one leading manufacturer and one supplier is proposed. Based on different carbon permit constraints, we derive optimal decisions in four different carbon trading cases. Then, we conduct the comparison and sensitivity analysis. The result indicates that (1) Inner carbon trading may not affect manufacturer’s production and carbon emission reduction (CER) decisions, but it always affects the supplier’s wholesale price. (2) Inner carbon trading can benefit the environment only when the manufacturer’s surplus permits are insufficient. In other inner carbon trading cases, the impact on the environment is equal to that in the outer carbon trading case. (3) The increase in consumers’ low-carbon preference can promote the manufacturer’s CER and members’ profits, but it also leads to an increase in total carbon emissions. To control total carbon emissions, the government can increase the carbon tax or outer carbon trading price. (4) For given carbon permits, changes in important parameters may lead to the transformation of inner carbon trading cases, which causes huge fluctuations in members’ profits. Finally, we provide valuable managerial insights for the government and supply chain members.

Recycling mode selection and carbon emission reduction decisions for a multi-channel closed-loop supply chain of electric vehicle power battery under cap-and-trade policy

In recent years, the rapid growth of electric vehicle (EV) ownership in China has led to the large-scale retirement of power batteries. Establishing an effective recycling system for spent power batteries is a critical task. Therefore, we investigate the recycling mode selection and the carbon abatement decision in a closed-loop supply chain (CLSC) of EV power batteries under the carbon cap-and-trade policy. We propose four mixed-channel recycling modes in which two or three parties from a retailer, a third-party recycler and an echelon utilization enterprise participate in the recycling business. In the reverse chain, the collected spent power batteries are classified, wherein the echelon-utilizable batteries are processed into echelon utilization products for sale by the echelon utilization enterprise, while both the non-echelon-utilizable batteries and the post-echelon-utilized batteries are transferred to the manufacturer for extracting raw materials to produce new power batteries. We obtain equilibrium results by solving Stackelberg game models. The results reveal that when the competition intensity among recycling channels is below a certain threshold and the recycling price sensitivity is above a certain threshold, the optimal mode is the simultaneous participation of the retailer, the third-party recycler, and the echelon utilization enterprise. Otherwise, the optimal mode is the echelon utilization enterprise recycling with the retailer or third-party recycler. Higher recycling channel competition and lower recycling price sensitivity reduce the total recycling quantity. Higher carbon trading price, a lower investment cost coefficient for carbon abatement and increased consumers' low-carbon awareness will encourage the manufacturer to implement carbon reduction activities, thus reducing total carbon emissions. In addition, the engagement of the echelon utilization enterprise in the recycling business has a positive effect on relieving the recycling pressure and improving the manufacturer's profit.

Manufacturer's Encroachment and Carbon Emission Reduction Decisions Considering Cap-and-Trade Regulation and Consumers' Low-Carbon Preference.

Carbon emission reduction and achieving carbon neutrality has become an inevitable trend in the sustainable development era. We investigate the manufacturer’s encroachment and carbon emission reduction decisions considering government cap-and-trade regulations and consumers’ low-carbon preference. The equilibrium decisions for the four scenarios are analytically obtained and compared based using the Stackelberg game. A comparison with and without cap-and-trade regulation under two encroachment decisions regarding member’s profits and carbon emission reduction levels are conducted. It is shown that the encroachment decision is always advantageous for the manufacturer if the government decides not to implement cap-and-trade regulation, and the retailer always loses profit. Moreover, if the carbon quota is sufficient, cap-and-trade regulation benefits the manufacturer. Otherwise, the manufacturer’s encroachment decision depends on the appropriate initial unit amount of carbon emission and unit carbon price. The retailer’s profit may not always be hurt by the manufacturer’s encroachment with cap-and-trade regulation; unless the unit carbon price exceeds a certain threshold, a higher consumer’s low-carbon preference in the encroachment scenario reduces more carbon emissions than in the no-encroachment scenario for the manufacturer. Further, the rising platform commission rate causes the platform profit to increase first and then decrease; the platform profit will slightly decrease if both products become more substitutes.

Carbon emission reduction decisions in construction supply chain based on differential game with government subsidies

In the context of a low-carbon economy, carbon emission reduction (CER) has become an environmental issue of world concern. As a key industry sector for CER, buildings' CER behavior in the low-carbon building supply chain is affected by the policies of various national governments. This paper fills this research gap by studying and analyzing the CER decision of the construction supply chain under government subsidies with the help of differential game theory and MATLAB numerical analysis software. In this paper, the differential game model with the centralized decision-making (CDM), decentralized decision-making (DDM) and the introduction of cost-sharing contract (CSC) for CER in the construction supply chain under the government subsidies model with developers and contractors as stakeholders in the construction industry are constructed with the help of differential game theory, taking the amount of CER in construction as the state variable, and the optimal feedback equilibrium strategies of both parties in the 3 decision-situations are derived and compared, as well as the optimal trajectory of CER in construction over time. The study found that after the introduction of CSC, the total profit of the construction supply chain under DDM reaches the level of CDM. Complemented by government subsidies, the building CER and the market demand for low-carbon buildings reach optimal values for both parties under DDM.

Game theoretic analysis of prices and low-carbon strategy considering dual-fairness concerns and different competitive behaviours

The issues of rationality and fairness in channel profit distribution have gradually attracted the attention of channel members. In this paper, considering a manufacturer concerned with distributional fairness and two competitive retailers, where one is a fairness-neutral retailer and the other retailer is concerned with peer-induced fairness, prices and carbon emission reduction (CER) decisions are explored in a two-echelon supply chain. Four models are established for different behaviours and dual-fairness, and the optimal decisions are obtained. Furthermore, the impacts of the coefficient of CER, competition coefficient and dual-fairness concern factors are examined. The results show that Cournot competition is more beneficial for the CER level and utility of the manufacturer, while Stackelberg competition is more conducive to increasing the retailers' prices and utilities. Regardless of the type of pattern that the retailers play, the distributional fairness concern of the manufacturer has a negative impact on the CER level but has a positive effect on wholesale and retail prices, while peer-induced fairness increases the CER level and reduces wholesale and retail prices.

The Impact of CSR on the Performance of a Dual-Channel Closed-Loop Supply Chain under Two Carbon Regulatory Policies

Under different carbon regulatory policies, corporate social responsibility (CSR) activities will have different impacts on the environmental benefits of the supply chain and corporate carbon emission reduction decisions. In this study, we examine a dual-channel closed-loop supply chain consisting of a single manufacturer selling re-products generated from waste products and a single retailer selling new products and consider two settings: enforcing a carbon tax policy or enforcing a subsidy policy. Under each setting, we put CSR into account, construct two models for the retailer to implement or not implement CSR activities, and analyze the decisions obtained under optimal solutions. Through numerical simulation and comparative research, we observe that the carbon tax policy applies to the supply chain where CSR activities are implemented, while the subsidy policy applies to the supply chain where CSR activities are not implemented. Reasonable selection of CSR implementation methods with low-cost coefficients by the retailer is conducive to eliminating profit conflicts among supply chain members. The government should fully consider the decision-making thresholds of supply chain members to ensure the maximum effectiveness of the policy.